When the coronavirus began sweeping Alabama, infections surged in the state’s rural Black Belt, a region originally named for the color of its fertile soil that’s now known for its majority Black population. The Black Belt’s 16 counties, which stretch across the center of the state, include some of the poorest communities in the nation.

COVID-19 hits hard in these rural communities. "Every person that is stricken with the virus, you know them and you know them personally," said Perry County Commissioner Albert Turner Jr. The county, which Turner calls the proud birthplace of the Voting Right Acts, has lost six of its 10,000 residents to the virus, and 493 to 540 more have been infected.

Yet when Turner looked to the state for help slowing the spread of COVID-19, he was stymied. Alabama had allotted local governments $250 million out of its $1.9 billion in federal Coronavirus Aid, Relief and Economic Security (CARES) Act funds for virus prevention measures — with a hitch. The cities and counties had to pay upfront and apply for reimbursement from the state.

"The expectation that these towns and counties will have access to monies to spend and then be able to wait for reimbursement means that they really cannot play the game," said Felecia Lucky, president of the Black Belt Community Foundation, a philanthropic group that also offers organizational capacity building. "It also means that folks in these communities will be less protected than other communities, and that shouldn’t be the case because of your ZIP code."

In response, the Black Belt Community Foundation teamed up with Hope Credit Union to set up a revolving loan fund providing Black Belt local governments access to the federal dollars by offering them recoverable grants to make the necessary purchases to protect their communities.

Seven corporate and other foundations are guaranteeing the loan fund with a $1.65 million loss reserve pool. It’s an example of how corporate foundations and corporations themselves are stepping beyond traditional grantmaking to address inequality in access to capital with impact investing tools such as loan guarantees or direct investments in community banks. But to be truly meaningful, such initiatives must align with a company’s business model.

"Corporations are getting involved in equity lens investing," said Patrick Briaud, senior adviser with Rockefeller Philanthropy Advisors, which played a convening role in the Alabama initiative. "You’ll have corporates that move and others that want to participate for impact-oriented reasons but also to be competitive in this socially aware consumer era that we’re in."

Read the full article about impact investing by Meg Wilcox at Greenbiz.